The Premier Investments AGM on Friday was about my 400th attempt since 1998 at questioning public company directors at a listed company’s annual governance event since.
And Premier’s combative chairman Solomon Lew has demonstrated once again in my opinion that old male billionaires tend to be the most intolerant beasts you can encounter at such gatherings.
Kerry Stokes went so far as to call security at the Seven Network AGM in 2008, but he was good enough to apologise the following year.
Westfield founder Frank Lowy was easily the most combative chairman in the original 1998 AGM series for The Daily Telegraph, and he let fly again in 2014, triggering the worst publicity of his stellar business career.
Rupert Murdoch, then in his late 60s, allowed 14 questions in a row over about 40 minutes at our first encounter in 1999, but since the phone-hacking scandal he has run an authoritarian regime of security, free speech-limiting “meeting rules”, removing microphones, management interjections and draconian question limits.
The executive chairman of Reece Australia, Alan Wilson, is at times another particularly testy public company billionaire, as this audio archive from the 2008 AGM attests.
Friday was my first experience questioning Solomon Lew as chair of an AGM, and it was from an uncomfortably close proximity in the front row less than two metres from where he was standing.
It didn’t matter what Lew was asked, he seemed to me to be a closed shop. After terminating the webcast at the conclusion of his 25-minute speech, he rejected requests for an audio archive or transcript of the debate to be made available after the meeting. This is now the best-practice model articulated by the Australian Investor Relations Association.
When it was pointed out that only a tiny proportion of his 7600 shareholders were crammed into the small room on Church Street near the Yarra in Richmond, he said it was too bad for those who couldn’t make it, and “we’ll give them the map”.
There was a surprisingly big media contingent at the AGM, but none of the coverage ventured near the topic that appeared to first set Lew off: his being both a private retail investor and the chairman of a listed company that is 57.6% owned by independent shareholders.
Asked why last year’s David Jones investment opportunity wasn’t offered to Premier Investments he said it was all about exiting his separate private investment in Country Road, and the outcome proved very successful.
Premier does hold 84% of Solly’s $280 million 32.8% stake in the ASX-listed Breville Group, but other plays over the years such as Witchery, Globe, Colorado and Australian Pharmaceutical Industries have all been done exclusively through his private investment vehicles.
The re-election of directors was also a major point of tension. Neither of the two candidates were allowed to speak, which was the rule Lew also applied to highly paid CEO Mark McInnes, who didn’t say boo for the entire 65-minute meeting. So why then set up fixed microphones in front of all of the directors?
Rather than answer questions, Lew counter-attacked, demanding to know how many shares I owned and who I was representing.
Not many and myself was the answer, and the old gag about being his “tallest and smallest shareholder” did little to defuse the situation. He again demanded the size of the shareholding, which I just didn’t know. Turns out to be a handy eight shares worth $112.
As tensions rose, Lew's house broker Bell Financial Group chimed in with some positive comments to try and “balance the ledger”. The speaker was none other than Andrew Bell himself, one of the three Bell brothers who still largely control firm.
Bell Financial Group and Premier Investments are both Melbourne-based companies, which, in the past, have responded to some detailed AGM questioning by shifting proceedings to Sydney.
I had a 20-minute debate with then-Premier chairman Sir Ron Brierley at the 2003 AGM, and the next two AGMs were shifted to Sydney, and in 2005 no shareholders bothered to turn up, prompting a headline to that affect in the AFR.
The tone never improved as the meeting neared its conclusion on Friday. When asked why a female-focused company like Premier has only one female director, Sally Herman, Lew insisted this was done on merit and then talked about the retailing credibility of Herman’s father rather than Herman herself.
When it was pointed out that he’d sacked all four female directors of Just Group after the 2008 takeover, he claimed that none of them were currently sitting on any retail boards. Why would you needlessly insult people like Susan Oliver, Alison Watkins, Laura Anderson and Bronwyn Constance in this way?
The final key issue of the day was remuneration. At first Lew refused to display the proxies before the debate on each item but it was then flashed up on the screen that there had been a 31% protest vote and a first strike against the remuneration report.
However, there was no opportunity to discuss this until the later pay item. When asked why there had been a strike, Lew instead talked about all institutions voting in favour of the incentive grant to McInnes, which they did.
Thanks to some good journalism by The Australian’s Eli Greenblat and the Herald Sun’s John Dagge, we found out on Saturday that proxy adviser Ownership Matters had lead the charge against Premier’s remuneration report because short-term cash bonuses paid to McInnes had been disclosed years after the event.
Why couldn’t Lew just explain this, vow it would never happen again and move on?
Instead, he seemed to me to go all combative with an attack on proxy advisers, and this just added to the negative coverage Premier received in the Saturday papers.
Lew seems to be beyond any PR advice, but it might be best for all concerned if the 70-year-old returned to his old model of controlling Premier Investments while not sitting on the board?